Guest Column: N.J. Casino, Local Business Failures Should be a Warning for Florida

Carol Dover, President and CEO of the Florida Restaurant & Lodging Association, wrote an op-ed that perfectly summarizes the threat that the expansion of casino gambling would bring to Florida. She uses the example of the plight of Atlantic City as the warning that Florida should heed when it comes to the damage that the so-called “destination resorts” could bring to our state.


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N.J. casino, local business failures should be a warning for Florida

The well-publicized closings of four casinos and corresponding loss of some 8,000 jobs in Atlantic City in 2014 — with the future of the nearly 3,000-employee Trump Taj Mahal also highly uncertain as we entered the New Year — has stirred renewed debate about the years-long fight to prevent Malaysian and Las Vegas gambling conglomerates from building megacasinos in Florida.

On one side are casino proponents who discount Atlantic City’s plight as an aberration resulting from lax restraints on the number of casinos allowed there. They assure us the same would never happen in Florida. On the other side are casino opponents who point to the gambling industry’s track record of oversaturation and insatiable appetite for building new casinos whenever and wherever they can. Just consider that 23 states now have commercial casinos within their borders, with their numbers increasing each year.

These broader arguments obscure another form of economic ravaging that began 37 years ago when Atlantic City became the first locale outside Las Vegas to open legalized casinos: the destruction of locally owned businesses.

After casinos opened in Atlantic City, 40 percent of the local restaurants and one third of the retail establishments there were driven out of business. Unfortunately, that shouldn’t be surprising. Anyone who has visited large casino hotels knows their operators work hard to encourage their guests to eat, drink and stay in their establishments, rather than outside their doors. Free or heavily subsidized room nights, meals and drinks are a common industry practice.

A year ago, as outside casino interests were amassing their forces and deep pockets for yet another assault on the Sunshine State — following three earlier tries that were rebuffed by Florida voters — the Florida Restaurant and Lodging Association and other concerned groups were pointing to the gathering economic storm clouds that have now settled over Atlantic City as a foreshadowing for Florida.

Still, few if any could have predicted the rapid, domino-like failure of such iconic Atlantic City gambling venues as the Atlantic Club, Trump Plaza, the Showboat, and the 2-year old “destination resort” Revel Casino.

Sad events, indeed, for the thousands of displaced casino workers, who are now filling New Jersey’s unemployment offices. And for Atlantic City, which is watching helplessly as more than $2 billion in property value evaporates from its tax rolls.

Most economic “success” stories promoted by casino gambling interests derive from places that have little in common with New Jersey or Florida — like Las Vegas and the Mississippi Gulf Coast, where virtually no commerce existed before the introduction of casinos. But studies show that in developed economies, the emergence of “destination casino resorts” such as those proposed for Florida inevitably comes at the expense of existing jobs and businesses, just as it did in Atlantic City.

Moreover, according to an economic study of casino gambling commissioned by the Florida Legislature last year, 95 percent of casino revenue would come from Florida residents, not tourists. So, money gambled in a casino is money that won’t be spent in a local restaurant, entertainment complex, movie theater, night club or some other sector of Florida’s economy.

The study called this “reallocation of consumer spending.” We call it cannibalization. No matter what you call it, the outcome is the same: Casinos have no real, net benefit to the local economy. Their damage, on the other hand, can be severe and lasting.

Just ask the residents and former small business owners of Atlantic City.

Tom Feeney, president and chief executive officer of Associated Industries of Florida, advocated for “destination casinos” in a guest column for the Tampa Tribune on Oct. 1. He suggested they would bring first-class resort and convention amenities to our state — as if that’s something we lack. Florida is home to some of the finest hospitality venues in the world. We have a global, family-friendly reputation. We attract about 100 million visitors each year.

Not surprisingly, casino-gambling giants want a piece of the action. It’s up to Florida’s leaders and citizens to ensure we do not risk decades of hard work and economic progress by betting on their houses of cards.

Carol B. Dover is president and CEO of the Florida Restaurant & Lodging Association.

You can read the column on the Orlando Sentinel’s website by clicking here